You’ve invested your sweat and tears (and a solid chunk of budget) into making your app stand out, yet users keep disappearing? This is what we call a high churn rate in the industry, and it’s every marketer’s worst nightmare.
Decreased social media engagement, unhappy customer reviews, and, inevitably, the revenue drop—are all signs of a high customer churn rate.
Fortunately, we know exactly how to help! Keep reading to learn about churn and the best marketing strategies for minimizing its effect on your business.
What is customer churn rate and why it matters
Churn rate (also known as customer attrition) is a business metric that measures the percentage of customers who stop paying for or using your product or service within a particular time frame. This critical metric directly impacts customer retention and overall revenue stability as it alerts you when something goes amiss with your user engagement.
It is common to divide customer churn into three categories: early, mid, and late, depending on the stages of user lifecycle—how long they have been using your app.
For mobile apps specifically, churn rate refers to the percentage of users who uninstall the app or cease actively using it after downloading. Monitoring churn rate in mobile apps provides insights into crucial indicators, such as user satisfaction, app functionality, and the effectiveness of engagement strategies.
Jump to the most common reasons for churn and strategies to avoid it
How to calculate churn rate: The formula
You need to know how to calculate the customer churn rate to be able to monitor it.
To calculate the average customer churn rate, you’d need to divide the number of customers lost during a set period by the number of customers at the beginning of the period, multiplied by 100 to get a percentage right:
For mobile apps specifically, you can calculate the churn rate like this: 100% − retention rate. For example, at Pushwoosh, we rely on event-based churn rate calculations, leveraging data from the user device registration date and last app opens.
Gross revenue churn vs net revenue churn
To measure the impact of revenue losses due to customer churn, you can look at the numbers of gross revenue churn (how many customers you lost and what it meant for your income) or net revenue churn rate (gross churn’s impact together with the revenue gained from existing customers), depending on your business model.
Understanding these metrics can prove crucial for accurately assessing the financial health of your organization.
However, when talking about mobile apps, it’s important to highlight that customer churn rate majorly comes down to the app usage itself, not the direct revenue implications it may have.
Сustomer engagement: Your go-to metric when it comes to customer churn rate
In its essence, churn rate simply shows whether your app matches your users’ expectations. That’s why customer engagement is one of the core metrics when it comes to churn rate prediction, as it indirectly illustrates how well your application caters to your users’ expectations.
Low customer engagement means inactivity and unsubscribes—a.k.a. churn. And at the same time, high customer engagement implies that you’re generally safe.
Customer engagement metrics to keep an eye on in the context of churn rate
Different metrics typically associated with engagement can also help you predict user churn. For example, MAUs (monthly active users) show how many active users use your app at least once a month. A significant drop in this metric is a clear sign of churn.
Or, low CTR (click-through rate) associated with your in-app communications could imply that users are growing tired of your application, and you need to react fast before they decide to turn to competitors.
Similarly, your average user retention rate can show at which stage users are most likely to churn so you can focus on that area specifically.
Other helpful metrics would be session length, customer satisfaction score or NPS score, bounce rate, or even upgrade and downgrade rates.
Main reasons why customers churn and strategies to counter it
#1 Reason for a high churn rate: Poor engagement strategy
At its core, churn rate is nothing short of the dark side of low customer engagement. When there are no specific drivers to keep users regularly interacting with your app, they tend to lose interest or forget about its existence just to eventually uninstall it for good.
Do you encourage in-app purchases? Do you reward their milestones? Or do you hope they’ll keep coming back because the product is “good enough”?
The solution: Keep users engaged with personalized messaging
Personalized messaging—both in and out of the app—is the best weapon in your arsenal against customer churn.
For example, one of Pushwoosh's customers, SPORT1, successfully keeps more than five million MAUs with push notifications!
Cross-channel push notifications strategy by SPORT1 to grow user engagement
How to achieve similar results?
Personalized messaging is about connecting with your users through the most convenient channels at the right time. There are many different ways you can go about it, but here are a few tips to get you started:
✅ Use behavior-based push notifications: Remind users about unfinished actions or encourage them to re-engage with your app.
- Did they leave a product in a cart? Send a mobile push encouraging them to complete the purchase!
- Did they check your pricing page for potential plan upgrades? Send an in-app message with a limited-time deal just for them!
With Pushwoosh, you can tailor automatic communications easily using default behavior-based events:
✅ Automate lifecycle campaigns that react to user activity: Reward frequent users and re-engage inactive customers.
- Did you notice a user hasn’t logged in to your app for over a week? Pique their interest with a special incentive.
- Has someone consistently interacted with your application for an entire month? Celebrate their loyalty with a widget or a suitable award.
For example, Gardenscapes greets you with a galore of rewards if you come back to the game after a long period of inactivity:
✅ Leverage the multichannel reach: Combine push, in-app, email, SMS, and WhatsApp notifications to ensure your message gets delivered.
- Did the user successfully complete a purchase? Send an in-app message encouraging them to join your loyalty program!
- Did they abandon their cart at checkout? A short mobile push notification can bring them right back!
To automate this seemingly complex process, use Pushwoosh Customer Journey Builder. The tool is intuitive enough to go from simple automations to advanced workflows like the one below:
#2 Reason for a high churn rate: No habit formation
If users do not develop a habit of using your app, they are more likely to stop using it altogether. On the other hand, a habit gives users a reason to come back to your application day by day. So habit formation can be a crucial element in your churn prevention strategy.
The solution: Build consistency with smart engagement
Wellness and education apps have mastered daily engagement. From motivational reminders to event streaks to warning messages based on FOMO, they know how to get users back in. You know, like Duolingo does:
How to achieve similar results?
You may not have an abusive green owl for a mascot, but you surely have all the necessary tools to become just as popular!
✅ Gamify engagement: Send streak reminders and progress-based notifications to encourage daily use.
- Running a mobile gaming app? Include prizes for daily engagement or run weekly contests to entice the users to log in regularly.
- Focusing on food delivery or transportation? A special set of daily discounts from your users’ favorite vendors could do the trick.
For example, Beach Bum knows how to drive users back to the app with personalized challenges, translating into tripled CTR, DAU, and MAU rates!
✅ Create automated re-engagement loops: Remind users why they downloaded your app in the first place. Regularly.
- For a media platform, you could send an evening push notification linked to that day’s digest.
- Or, better yet, send mobile pushes with the most relevant headlines instantly as the news breaks!
For example, GB News manages to send over twelve million push notifications daily with Pushwoosh to keep their audience consistently engaged:
✅ A/B test different engagement strategies: User engagement and retention is a game of trial and error, so don’t be afraid to experiment to find what keeps users coming back.
- Not sure which channel works best for your selected audience? Split-test the groups and see which one responds better!
- Want to hit the best sending time and see if you can trust automation? A/B testing can help you check it against manual scheduling.
Here is how one of Pushwoosh’s customers proved that the Best time to send is indeed the best time for engagement:
Engaging messages are the best way to stay on top of users’ minds; however, be carefulnot to fall for yet another common reason for customer churn.
#3 Reason for a high churn rate: Too many irrelevant notifications
There is a lack of engagement, and then there is too much engagement, which can be just as deadly for your app’s long-term revenue and customer churn. Modern-day users are savvy, and you can’t simply bombard them with communications, hoping that one of those would stick. The effect would most likely be the direct opposite.
Overloading users with non-targeted, frequent communications can lead to notification fatigue, which will inevitably lead to them disabling notifications and/or uninstalling your app.
The solution: Deliver value, not spam
Not only is spam annoying, but it is also illegal in most countries, especially when it comes to email marketing, so being flagged as a spammer won’t do your business any good and will most definitely increase your churn rate. Instead, focus on communications that will drive actual value to a specific user and, please, refrain from generic messaging for good.
One of the easiest ways to achieve that is to let users choose and customize what kind of notifications they want to receive from you, just like Wetter.com did, growing their audience three times in a year:
How to achieve similar results:
While giving users a choice is an important element, there’s more to a smart messaging strategy than that. And here, automation can be your best friend!
✅ Smart segmentation: Build user groups and send messages based on their interests, in-app behavior, and preferences.
- For media apps, you definitely don’t want to spam your users with every single update on your platform. Instead, let them choose the topics they’re interested in and set up their notifications for those alone.
- Or, if the user hasn’t engaged with any of your communications in a while, it may be a good time to revisit your strategy and check if they are still receptive to your communications on that channel.
For example, this Pushwoosh workflow is built to identify the best channel to reach each user without being intrusive:
✅ Frequency capping: Avoid bombarding users with notifications by setting smart limits to the number of messages sent to each user.
- A single user is likely to be included in several campaigns. To avoid overwhelming them with communications, features like Global Frequency Capping will set a limit on the number of messages you send for a specified timeframe.
- Make sure to configure critical messages to make sure any transactional or urgent updates (e.g., transaction confirmations for fintech apps) can still get through.
With Pushwoosh, the setup is really simple:
✅ Best time delivery: Send automated messages when users are most likely to engage for the best results.
- Not sure when is the best time to send that promo email? A good automation engine will analyze other times people were most engaged with your communications and select it for you!
- Struggling with multiple timezones? A feature like Pushwooh’s Optimal Time can simplify that as well!
No one churns as quickly as a user who’s done with your constant notifications. Make sure all your reminders are timely and relevant, and you’ll succeed!
#4 Reason for a high churn rate. Lack of user onboarding
Another common reason for users to churn is a lack of clear instructions on what your product is capable of in the first place. With personalized onboarding, users can understand and find value in your app much quicker. Without it, however, they may see no reason to continue using the application.
The solution: Always guide users through your product
Taking time to explain how the app works and what it can do for you can be crucial in engaging first-time users and reducing the early churn rate in the process. For example, Map Your City was able to grow user retention from Day 7 to Day 30 with push notifications onboarding strategy:
How to achieve similar results:
✅ Set up a welcome workflow: Guide users step by step as soon as they log in to your app for the first time.
- Start with a friendly push notification once they’ve signed in to the application.
- Follow up with an onboarding email sequence to cover more intricate details about your product.
For example, Sea of Thieves leverages email to the fullest, carefully walking the user through everything the game has to offer:
✅ Use in-app messaging: Highlight key features and encourage first actions.
- Create a visual guide through your app for first-time users so that they understand the specifics right away.
- Promote new features to make sure users don’t churn because of missing out on the updates.
Take PlantApp, for example. Your user experience begins with a careful overview of how to use an app:
✅ Trigger contextual nudges: Help the users out when you see them getting stuck early on when users get stuck.
- If the new user hasn’t completed their registration, send a friendly notification explaining what’s in it for them (e.g., better personalization, discount, etc.);
- If your app requires personal data (such as IDs, documents, bank statements, etc.), make sure to clearly communicate how you’ll use it and why.
For example, Revolut uses both in-app and mobile push notifications to make sure none of their users lose valuable app functionalities.
Remember that while onboarding heavy lifting usually falls on the first few days of a user interacting with your app, it is actually an ongoing process to help them grow alongside your product.
#5 Reason for a high churn rate: Users move to competitors
Here, it’s easy to think that this is out of your control and what’s done is done. Yet, it’s your job as a marketer to ensure you understand why some of your users leave and what could be done to prevent your churn rate from growing.
The solution: Win them back with personalized offers
Re-engagement, just like re-marketing, can be an effective way to fight user churn. Here, it’s important to understand the reasons behind original churn and come up with a solution for the users you’ve successfully won back.
AvaTrade had a 12% increase in conversion rates by reaching out to previously inactive users with some enticing offers:
How to achieve similar results:
✅ Identify at-risk users with predictive analytics: Spot those who are slipping away early on to prevent churn.
- Analyze user behavior to spot those who are likely to churn with a special analytics software built just for that.
- Personalize the offer for at-risk segments to retain them effectively.
For example, Pushwoosh features an extensive RFM segmentation in place, helping you identify users showing signs of potential churn:
✅ Trigger win-back campaigns: Drive users back to your app before they decide to uninstall it.
- Set up automated communications to be triggered by inactivity for a certain period (e.g., “We miss you! Here’s a special offer just for you.”).
- Drive users back to your app with personalized offers to make sure you stay on their top of mind.
Your setup could look something like this:
✅ Personalize communications: Remind users what they loved about your app based on their past activity.
- Remember the behavior-based segmentation we talked about at the beginning of the post? Leverage it to tailor your win-back campaigns and fight churn across multiple channels!
- For example, you could announce a discount on a recently browsed product, offer a streak freeze, or remind about an ongoing sale.
Here, Telepizza leverages geolocation personalization to promote a special offer with a push notification:
As long as your app puts customer experience first and doesn’t hold back on valuable updates, your users should have no reason to turn to competitors. Keep that in mind, and keep your churn rates down!
Additional tips to minimize customer churn
The strategies we’ve covered above should help you keep your audience engaged and prevent them from even thinking about churning. But if you’re seeking even more ways to ensure your retention rates stay high, try some of these tips:
- Optimize your app’s store listing: Make sure it’s descriptive and engaging from the start to increase the number of downloads;
- Encourage customer reviews: Ask for honest, real user reviews from within the app or via push notifications. Peer reviews are crucial!
- Build a loyalty program: Nothing encourages people to choose your product over competitors more than already accumulated bonus points, leading to a juicy reward.
- Improve your customer support: They are often the face of your business, so it’s worth investing in the timely, friendly, and helpful CS experience.
And with these, you’re all set for success!
Grow user engagement to reduce churn rate
Reducing churn rates isn’t hard when you have a solid engagement and retention strategy in place. All it really takes is three steps:
- Identify churn signals early on
- Re-engage at-risk users with personal communications
- Automate retention loops with good marketing software
Pushwoosh can help you every step of the way! Request a demo and see for yourself.
